Roundup: Higher inflation than expected

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It is now day fifty-seven (or so) of Russia’s invasion of Ukraine, and hope is waning for the remaining defenders of Mariupol, and the civilians still sheltering there. As the fighting intensifies in the eastern part of the country, there are also concerns that it will devolve into a war of attrition, which Russia has historically been more able to withstand. We have also learned more about what happened when Russian troops occupied Chernobyl, where staff were working at gunpoint, and sleeping three hours a night in order to safeguard the site and ensure that Russians didn’t tamper with any of the equipment there.

Closer to home, the inflation numbers were released yesterday, and they were much higher than expected, as conflict inflation brought on by the aforementioned invasion of Ukraine is hitting. And of course, most media outlets were useless in explaining the causes of it, while the parties were equally useless in their own reactions. The government keeps focusing on their talking points about things like child care and dental care, and the fact that they indexed benefits, rather than actually explaining the drivers. The Conservatives are railing about “printing money” (which, to be clear, nobody is actually doing) and insisting that the government should declare a GST holiday, which would a) do nothing for grocery prices as most groceries are GST-exempt; and b) would have a stimulative effect and just fuel even more inflation, especially as people would be likely to use said GST holiday to buy big-ticket items. And the NDP, predictably, chalk this up to greed and want higher wealth taxes, which again, do very little about the drivers of inflation.

And then there’s the Bank of Canada, who will be forced to respond with higher rate hikes, but the question becomes whether they’ll keep the increases more gradual—another 50 basis points at the next meeting in June—of if they’ll go even higher as a way of demonstrating that they are really taking this seriously and that the system of inflation control that they’ve been responsible for since the 1990s will prevail. It doesn’t directly address the drives, but it could be that the signals are more important than the actual policy at this point, because the bigger worry is the expectation that inflation will continue, which will turn it into a self-fulfilling prophecy—something they are very, very keen to avoid.

Good reads:

  • Justin Trudeau reiterated that heavy artillery is being sent to Ukraine, but won’t give any details for operational security reasons.
  • At a G20 finance ministers’ meeting in Washington, Chrystia Freeland and other officials walked out when Russian officials started speaking.
  • The Privy Council Office has confirmed that the legislatively mandated inquiry into the Emergencies Act will be called before the 25th.
  • Sean Fraser announced a way to donate Aeroplan miles or cash for flights for Ukrainians to come to Canada.
  • Seamus O’Regan says the government is planning legislation to ensure Canadian companies are not using slave labour or child labour in their supply chains.
  • Oh, look—jurisdictional hurdles with the dental care promise! Who would have guessed? (Also, Don Davies needs a reality check on the constitution. Cripes).
  • In court documents, retired general Jonathan Vance admitted to sexual relations with a subordinate and the child he fathered, which he previously publicly denied.
  • Conservative leadership candidate Scott Aitchison has decided to come out against Supply Management, so that’s novel (and will probably doom his campaign).
  • A group of Conservatives calling themselves “Centre Ice” are trying to advocate for more centrist policies, but won’t back any one candidate in the leadership race.
  • The Desmond Inquiry in Nova Scotia is wrapping up.
  • Kady O’Malley’s Process Nerd column identifies the seven government bills that will likely be prioritized over the 30 sitting days remaining until summer.
  • Mike Moffatt looks at the real estate fire in southwestern Ontario and traces the varied causes that contributed to it, including the pandemic spending patterns.
  • Heather Scoffield tries to be cute with the inflation figures and declares that everyone is a little bit right with the causes, when they’re really not.
  • Kevin Carmichael pores over the inflation data and how this changes the Bank of Canada’s calculations when it comes to how fast they are going to hike rates.
  • Ken Boessenkool boggles at Jason Kenney’s political strategy, which is unlikely to work out for him in the long—or even the medium—term.
  • Susan Delacourt worries about how toxic partisanship is driving polarization as businesses now fear boycotts and guilt by association with politicians.
  • My Xtra column carries on my interview with Sean Fraser, and gets into Canada’s aid for the migrant crisis in Central America, and how it affects LGBTQ+ refugees.

Odds and ends:

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2 thoughts on “Roundup: Higher inflation than expected”

  1. FYI, in the Good Reads section, the link to the Delacourt column goes to the National Post article about dental care.

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